# The 3-Minute Rule for Money To Bitcoin

Let us say you had one legit $20 and one really good photocopy of the same $20. If someone were to attempt to spend both the real bill and the imitation one, someone that took the problem of looking at either of the bills' serial numbers would see that they had been exactly the exact same number, and consequently one of them needed to be fictitious.

That isn't a great analogy--we'll explain in more detail below. .

Once a miner has confirmed 1 MB (megabyte) worth of Bitcoin transactions, they are entitled to win the 12.5 BTC. The 1 MB limit was set by Satoshi Nakamoto, and can be a matter of controversy, as some miners believe the block size should be increased to accommodate more data.

Note that I stated that verifying 1 MB value of transactions makes a miner qualified to earn Bitcoin--not everyone who verifies transactions will receive paid out.

1MB of transactions can technically be little as 1 transaction (though this is not in any way common) or several thousand. It depends on how much information the transactions take up.

In order to earn Bitcoin, you need to meet two conditions. One is a matter of work, one is a matter of luck.

2) You must be the first miner to arrive at the perfect answer to some numeric issue. This process is also known as an evidence of work.

The fantastic news: No advanced math or computation is involved. You may have discovered that miners are solving difficult mathematical problems--that's not true in any way. What they're actually doing is trying to be the first miner to think of a 64-digit hexadecimal number (a"hash") which is less than or equal to the target hash.

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The bad news: Because it's guesswork, you need a good deal of computing power in order to get there first. To mine , you need to have a higher"hash rate," which is measured in terms of megahashes per second (MH/s), gigahashes per second (GH/s), and terahashes per second (TH/s).

If you want to estimate official source just how much Bitcoin you could mine along with your mining rig's hash pace, the site Cryptocompare provides a very helpful calculator.

Either way a GPU (graphics processing unit) miner or an application-specific integrated circuit (ASIC) miner. These can run from $500 to the tens of thousands. Some miners--especially Ethereum miners--buy individual graphics cards (GPUs) as a low-cost way to cobble together mining operations. The photo below is a makeshift, high-tech mining machine. The graphics cards are such rectangular blocks with whirring circles. Note the sandwich twist-ties holding click for more the pictures cards to the metal pole.

Example: I tell three friends I'm thinking about a number between 1 and 100, and that I write that number on a sheet of paper and seal it in an envelope. My friends don't have to guess the exact number, they simply must be the first person to guess any number that's less than or equal to the number I'm thinking of.

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Let's say I am thinking about the number 19. If Friend A guesses 21they shed because 21>19. If Friend B supposes 16 and Friend C supposes 12, then they have both technically came at viable answers, because 16<19 and 12<19. There is no"extra credit" for Friend B, even though B's answer was nearer to the goal answer of 19. .

In Bitcoin terms, simultaneous answers happen frequently, but in the end of the day there can only be one winning answer. When multiple simultaneous answers are presented which can be equal to or less than the target number, the Bitcoin network will decide by a simple majority--51%--which miner to honour. Normally, it's the miner who has done the most work, i.e.

The losing block then becomes an"orphan block" .

Now imagine that I present the"guess what number I am thinking of" question, however I'm not asking just three friends, and I'm not thinking of a number between 1 and 100. Instead, I'm asking millions of prospective miners and I'm thinking of a 64-digit hexadecimal number. Now you see that it is going to be quite difficult to guess the right answer.

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The number preceding has 64 digits. Easy enough to understand so far. As you likely noticed, that number consists not just of numbers, but also letters of this alphabet. Why is that

In order to understand what these letters are doing in the middle of numbers, let us unpack the word"hexadecimal."

As you knowwe utilize the"decimal" system, which means it is base 10. This in turn means that each and every digit has 10 possibilities, 0-9.